Patient deaths force FDA to slam the brakes on PhIII program for CTI/Baxalta's pacritinib

After a follow-up review, the FDA has decided that the adverse events and deaths recorded in CTI BioPharma's pivotal program of the myelofibrosis drug pacritinib are so alarming that they've imposed a full clinical hold on the trial, halting dosing and persuading the biotech to yank its newly completed drug application.

On Monday the company ($CTIC) reported that the FDA was asking for a partial hold on the study, but it now says that regulators followed up with a more alarming red flag after tracking additional patient deaths in PERSIST-2, the second of two Phase III studies. The drug is a JAK2/FLT3 treatment partnered with Baxalta ($BXLT).

Already trading as a penny stock after the company's most recent fiasco came to light on Monday, CTI shares slid a further 43% to a mere 29 cents a share Wednesday morning. The news also affects Shire, which is in the process of completing its acquisition of Baxalta.

"The deaths in PERSIST-2 in pacritinib-treated patients include intracranial hemorrhage, cardiac failure and cardiac arrest," CTI said in a statement issued late Tuesday. "The FDA made recommendations that supersede the recommendations made by the FDA in connection with the partial clinical hold imposed by the FDA on February 4, 2016. The current recommendations include conducting dose exploration studies for pacritinib in patients with myelofibrosis, submitting final study reports and datasets for PERSIST-1 and PERSIST-2, providing certain notifications, revising relevant statements in the related Investigator's Brochure and informed consent documents and making certain modifications to protocols. In addition, the FDA recommended that the company request a meeting prior to submitting a response to full clinical hold."

CTI and Baxalta finished a rolling submission for regulators just a few weeks ago.

The biotech has experienced repeated setbacks over the years for its first drug, pixantrone, which has never been approved in the U.S. The company's stock plunged 50% on Monday.

- here's the release